Being Made Redundant and Unsue Wisest Way to Spend Cash

kelswain

Hi I was hoping you can help.

My Father is being made redundant. Both him and my bother have quite a lot of debt and a mortgage.

The mortgage will be covered by insurance for 6months, but all other debts will still have to be paid.

They are both in dispute aboput how best to spend the money as my mother would like to pay off some debts in full, where as my father would like to sit on it and know that all his bills will be covered for at least 9 months incase he doesn't get a job :huh:

Please help...

zzzLazyDaisy

Okay, is your father likely to be claiming means tested benefits over the next period? If so, he should be very careful about settling debts that are not yet due. By that I mean that it is fine to pay outstanding debts such as unpaid bills etc as they have already fallen due. It is also fine to pay loan/hp repayments as they fall due, but if he pays off the loan before its due date, he will be assessed as still having access to that money (google deprivation of assets).

Also, if the redundancy money includes a payment in lieu of notice he will not be entitled to JSA during the notice period, as this money is intended to compensate him for loss of wages during that period.

So I am with your father on this, at least until he gets another job.

NOTE: If the total amount of the lump sum comes to less than £6000 there would be no come-back as you are allowed to have that much money in savings and still claim means tested benefits.

warmhands.coldheart

Not sure on others views but hold of on re-paying in full any unsecured loans as these are the least important ones and can be negotiated on at later dates down the line if a new job is not forthcoming.... it's the secured loans like mortgages that are the most important to keep paying.

getmore4less

zzzLazyDaisy wrote: »

Also, if the redundancy money includes a payment in lieu of notice he will not be entitled to JSA during the notice period, as this money is intended to compensate him for loss of wages during that period.
.

JSA is claimable from day one after redundancy

this comes up often it changed in 2007.

zzzLazyDaisy

getmore4less wrote: »

JSA is claimable from day one after redundancy

this comes up often it changed in 2007.

Could you clarify this please?

I know that payment in lieu of notice is not taken into account for means tested benefits, but as far as I am aware, you cannot claim JSA during the period covered by the notice pay. I am finding conflicting information about this, so I'd be grateful for an up-to-date link.

Also, it is my understanding that while redundancy pay (and other lump sums) are not treated as income for benefits purposes, it is still treated as capital, so a redundancy payment above £6000 will still take a claimant over the lower capital band for means tested benefits.

I accept that benefits are not my specialist area, but all the information I have says that it still the case. I should stress I am am more than happy to be proved wrong, but I'd be grateful if you could give me a link to the relevant regulation/law/guidance so I can follow this up. Thanks

sibles

@zzzLazyDaisy - the way it has been explained to me is that Pay in lieu would not stop you claiming JSA, you are no longer required at that job. However, if you are on garden leave you have to be available for work, so you have to wait until you leave.

getmore4less

https://forums.moneysavingexpert.com/discussion/4228555

there is a reference to the changes see if you can find something that changes it back.

There are probably a lot of out of date references saying the pilon still counts.


Remember the goverment redundancy pot takes of JSA from any PILON payments due so they expect you to claim and get paid the JSA

you could research the JSA regs
http://www.legislation.gov.uk/uksi/1996/207/contents/made



and amendments.

zzzLazyDaisy

Thanks for the info - I am SOooo pleased benefits is not my area! But as I do help individuals with advice/information about dismissals and redundancies, from time to time, I'd like to at least have a basic grasp of the ensuing benefit situation - if only to point them in the right direction

pmlindyloo

Just for clarification.

The OP's father can claim contribution based JSA for 6 months. (I am assuming that he meets the NI contributions for the last 2 tax years)

Contribution based JSA is not means tested. His redundancy money and any other income will not affect his claim.